Forexpros – The New Zealand dollar rallied to a three-month high against the U.S. dollar on Friday, as risk appetite was bolstered by renewed hopes for action to stem the debt crisis in the euro zone and better-than-expected U.S. employment data.
NZD/USD hit 0.8066 on Wednesday, the weekly low; the pair settled at 0.8183 by close of trade on Friday, up 1.03% on the week.
The pair is likely to find support at 0.8069, Thursday’s low and resistance at 0.8234, the high of April 30.
Markets rallied on Friday, after European Central Bank President Mario Draghi indicated Thursday that the bank would restart its bond buying program, to help lower Spanish and Italian borrowing costs.
Markets initially turned lower following Draghi’s remarks, after he indicated that any intervention by the ECB to calm bond markets would not come before September.
In the U.S, the Department of Labor said the economy added 163,000 jobs in July, the biggest increase since February and outstripping expectations for an increase of 100,000, following a downwardly revised increase of 64,000 the previous month.
However, the U.S. unemployment rate unexpectedly ticked up to 8.3%, from 8.2% in the preceding month, keeping alive speculation over further monetary stimulus from the Federal Reserve.
On Wednesday, the U.S. central bank refrained from implementing fresh easing measures following its policy meeting, but the Fed said economic growth had slowed in the first half of the year and reiterated that it stood ready to provide additional stimulus as necessary.
Meanwhile, ratings agency Standard and Poor’s reaffirmed New Zealand’s credit rating and said its outlook its is stable on Friday, citing its fiscal flexibility and resilient economy.
In the week ahead, market participants will continue to keep a close eye on developments in the euro zone, as investors continue to digest the implications of the ECB’s recent decisions.
Markets will also be paying close attention to speeches by Fed Chairman Ben Bernanke on Monday and Tuesday, amid ongoing speculation over the possibility of more easing from the U.S. central bank.
Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets.
Monday, August 6
In the U.S., Fed Chairman Ben Bernanke is to speak; his comments will be closely watched for any indications of the future possible direction of monetary policy.
Tuesday, August 7
New Zealand is to publish official data on labor costs, a leading indicator of consumer inflation.
Later Tuesday, Fed Chairman Ben Bernanke is to speak at an event in Washington DC.
Wednesday, August 8
The U.S. is to release government data on labor costs and productivity, leading indicators of consumer inflation. The country is also to release official data crude oil stockpiles.
Thursday, August 9
New Zealand is to produce government data on employment change and the unemployment rate, leading indicators of economic health.
The U.S. is to release official data on the trade balance, the difference in value between imported and exported goods, as well as the weekly report on initial jobless claims.
Friday, August 10
The U.S. is to round up the week with official data on import prices and the federal budget balance.
Forexpros
